COIR SPINNING UNIT (AUTOMATIC)
Introduction:
Coir is a natural fibre extracted from the husk of the coconut. Among the natural fibre, coir has
some unique characteristic particularly its rigidity, durability and friction.
Coir Industry in India is one of the important rural industries. Although the coir industry has
traditionally been associated with the State of Kerala, but now this industry has developed in
Tamil Nadu, Orrisa, Andhra Pradesh and Karnataka. Assam is one of the leading states of India
in production of coconuts. There is significant production of coconuts is Tripura also. This could
form the basis for development of the coir industry in the North East which can generate
substantial employment. The main uses of coir rope/yarn are in the construction of houses,
industrial building, tying ladders, packing of large boxes and also for drawing water from wells.
Market Potential:
As stated, one of the main uses of coir rope in the construction of houses and buildings. Due to
tremendous rise the construction of Multi-storied building, ownership flat, shopping mall in the city
and urban areas, stadium, Govt. and Private offices and RCC construction in the rural areas the
demand of coir yarn or rope has been increasing drastically. As there is no automatic or semi-
automatic yarn manufacturing unit in Assam, the present requirement of fibre are met from
Andhra Pradesh an Orissa. As per the information available with Coir Board the present demand
of Rs 4 Crores per year of coir rope is the N.E. Region. Considering the demand of coir
yarn/rope, coir spinning unit has viability.
Plant Capacity:
The production basis for a Tiny Unit would be as under:
Working hour per day : 16 hours (2 shift2)
Production capacity : 800 Kg per day.
Working Days in a year : 300 days
Capacity Utilization : 85%
Annual production : 221 MT.
Raw Materials:
The main raw material is coconut fibre, which could be extracted from coconut husk. About 233
MT fibre required for the production of 221 MT of coir yarn/rope. The total production or coconuts
in the N.E. Region is approximately 200 million nuts per year of which Assam Accounts for
150.30 million nuts. In Assam, coconuts are grown mainly in Nalbari, Barpeta, Nagaon, Golaghat
and Lakhimpur district.
Process:
The main process steps involved are
i) Collection of Fibre
ii) Spinning of extraction fibre.
iii) Conversion of spun fibre to yarn/rope in machine.
Machineries:
i) Willowing machine 2 HP : 1 No.
ii) Silvering machine 2 HP : 2 Nos.
iii) Spinning machine 2 HP : 12 Nos.
iv) Spooling & Re-husking machine : 2 Set
Infrastructure:
The major infrastructural requirement are
Lane - 1 Bigha ( 14400 sq.ft)
Building /Washing shed - 2000 sq.ft.
Power - One transformer - 20 KW
Water Well & Pump set. - 5 HP
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Location:
Keeping in view the availability of coconuts, the suggested locations are
Assam : Nalbari, Barpeta, Golaghat, Nagaon,
Darrang.
Tripura : Agartala, Udoipur
Total Capital Requirement:
The total capital requirement including fixed capital and working capital is estimated at Rs. 20.82
lakh. Of this, the project cost comprising fixed capital and margin money on working capital is Rs
17.50 lakh.
A. Fixed Capital (Rs. in lakh)
Land 1.00
Building 3.85
Plant & Machinery with Motors 8.25
Electrical Installation including transformer 1.25
Misc. Fixed Assets 0.50
Preliminary & Pre-Op. expenses 0.45
Total (A) 15.30
B. Working Capital (Rs. in lakh)
Raw material 1 month 1.85
Finished goods 1 week 0.47
Working expenses 1 month 2.70
Receivables (L.S) 10 days 0.50
Total (B) 5.52
Note: Working Capital may be finance as
Bank finance 3.32
Margin money 2.20
5.52
Means of Finance:
The project cost of Rs 17.50 lakh may be finance as under
Promoters contribution(25%) 4.38
Term Loan(75%) 13.12
17.50
Operating Expenses:
A. Variable Cost:
Raw materials
Good quality of coir fibre 233 MT 22.14
@ Rs 9500/MT
Lead Thread 1.10
Wages & Salaries 40 workers @ 1500/- 60,000/-
2 Mechanic cum-
Supervisor @ 2500/- 5000/-
Watchmen 2 Nos.
@ Rs 1000/- 2000/- 8.04
Electricity & spares & Maintenance _ 1.20
32.48
B. Fixed Cost:
1) Depreciation on Building 5% = 0.19
on Plant & m/c 10% = 0.83 1.02
2) Interest on Borrowers Fund
13.50% on Term Loan = 1.77
12.75% on W.C. = 0.53 2.20
3.22
TOTAL OPERATING COST (32.48 + 3.22) 35.70
COST OF PRODUCTION PER MT Rs 16,154
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Sales Realization:
The market price of coir rope/yarn is about Rs 35 per Kg. providing for dealers commission and
other expenses a net ex-factory price of Rs 20/- per kg has been considered. On this basis, the
annual sales realization is estimated at Rs 44.20 lakh i.e. (221 MT of coir yarn @ Rs 20,000/-
MT).
Profitability:
Based on the sales realization and the annual expenses the profit @ 85% capacity utilization
would be Rs 8.50 lakh per year. This works out to a return on investment @ 48.57%. The unit
would break-even at about 27.47% of the rated capacity.
Highlight:
The major highlights of the project are as follows:
1. The capital requirement : 20.82 lakh
2. Promoter contribution : 4.38 lakh
3. Annual Sales : 44.20 lakh
4. Annual operating expenses : 35.70 lakh
(Fixed + Variable)
5. Annual Profit (Pre-tax) : 8.50 lakh
6. Pre-tax return on sales : 19.23 lakh
7. Break Even Point : 27.47%
8. Return on Investment : 48.57%
9. Number of person employed : 44 Nos.
Machinery Suppliers:
1. M/s Dollar Industrial Machines 2. Ananteswar Engineering Workshop
R.S. 109/3, Palamuthi Road, Sakhigopal, Puri,
Pathukkottai, Tamil Nadu, Orissa,
Ph: 04373 222308/235408 Ph: 06752 272207
3. M/s G.S. Industries,
K.P. No.17/761, Kollode,
P.O: Kattakkada,
Thiruvananthapuram
Ph: 695571
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